Indian exporters are estimated to see revenue growth of 9-11 per cent in FY25, benefiting from gradual liquidation of goods sold in key markets and a shift in receivables across the country, which is part of the adopted de-risking strategy. by several customers, said the report on Monday.
With the needed stimulus, credit rating agency ICRA expects capex spending to pick up in FY25 and FY26 and may remain in the range of 5-8 percent of profits. The long-term prospects for Indian exports are favorable, aided by improved acceptance of the product in end markets, changing consumer trends and government incentives in the form of the production-linked incentive (PLI) scheme, export incentives, the proposed free trade proposal. trade agreement with the UK and the EU, among others, the report noted.
Apart from the benefits to be gained from adding new capacity under the PLI programme, the PM Mega Integrated Textile Region and Apparel program is expected to strengthen India’s presence in global trade by providing significant benefits and strengthening the country’s presence in the man-made fiber value chain.
In the first half of the current fiscal, exports grew by 9 percent on a YoY basis to $7.5 billion. Srikumar Krishnamurthy from ICRA said that after a slight decline (down 2 percent) in FY24, Indian exporters are estimated to report 9-11 percent revenue growth in FY25.
Despite revenue growth, operating margin gains coupled with soft raw material prices, industry operating margins are expected to contract by 30-50 bps YoY in FY25 on increased labor costs, material costs and rise in other operating costs, he said. .
According to the report, the recent geo-political tension in Bangladesh may result in the addition of power from outside the country, including India. “Nonetheless, the availability of labor at competitive costs and access to specialized work, given its least developed country status for another two years in exports to the US and EU, helps Bangladesh remain competitive with many other developing countries,” the report noted.
